Small pension pot

Hi,
At the end of December i cashed in a small pension fund totalling £2450 in it's entirety , I took the whole amount because I didn't think £68 per year was worth having. I duly wrote to the DWP providing all the details.( I kept copies of the letter and sent it via track an Trace' it was received in January, but I no longer have the post office receipt ) I am in receipt of ESA support group , some of which is IR.
I was only moved to the support group from last September, although this wasn't actioned until May of this year. I also participated in permitted work from Sept 2014 through to sept 2015, working under 16 hrs. From September through to Dec 2015 I earned £20 per week, All of which was declared, and in keeping with DWP rules. I have not been involved in any form of permitted work since Dec 2015, even at the £20 per week rate.
In May this year I received a letter from DWP asking for wage slips from Feb 2015 from the fraud and error prevention service! I provided those and all other wage slips covering the whole period ,rather than just Feb! I also provided a copy of my p45 as well as another copy of the p45 from my pension provider, even though I had already sent it off in January! I might add I re-sent copies in addition to all wage slips even though I hadn't been asked to, because I felt it would be better to send everything regardless!
I have today received another letter from FEPS saying they are reviewing my entitlement using all info provided by HMRC from my earnings and pension provider! When I cashed in the pension I believed it would be classed as savings and as I only had £80 saving in total, I felt it would be OK to cash it in as it was well below the threshold. I am now feeling that they are going to divide it out over a12month period and class it as earnings, which of course would take me over the allowed amount! I actually received the money Dec 29th. I guess what I am asking is would they class it as earnings rather than savings even though I took the lump sum!
I have to admit The only advice I sought was from cab and was told it would be classed as savings!! Choosing this method rather than speak with DWP, because of the anxiety caused when dealing with them!! In hindsight I guess I should have just bitten the bullet! Im also thought that if there was Problem I would have heard from them sooner!
I am worried sick and know I shall have to phone them on Monday, but was hoping you could perhaps advice me whether or not this money should be classed as earnings or savings! I'm terrified that they are going to stop my payments.
Any guidance would be greatly appreciated.
Regards
Tricia

Hi Tricia,

I'm sorry that you are going through such a stressful time

The single payment that you received should be counted as savings. I hope you will soon have this situation sorted out so that you can relax and forget about DWP for some time!

Thank you Mrs Hurtyback. You have no idea how your reply has relieved my anxiety! I don't know why dealing with DWP increases my anxiety! I'm sure being on benefits is hindering my recovery! I worked for 43yrs paying higher rate income tax, but suffered a mental breakdown 5 years ago which resulted in losing my job! ( a blessing really as it became too stressful) so for the first time in my life I have had to rely on benefits! Which I believed was a great safety net for people who are suffering ill health! My experience is far from it, as I now know many others find themselves feeling as I do! In constant fear of the brown envelopes dropping through my letterbox or having to speak with anyone from their offices! Thanks to your reply and the help from this site I will hopefully sleep tonight!! Thank you, Thank you,Thankyou .

Hi,
Just a little update.
I plucked up the courage to phone the DWP earlier today, and fortunately I spoke to a very helpful lady. She assured me this was a fairly standard letter, merely outlining details of permitted work now that I am in the support group. She also assured me that the review was also a fairly standard procedure , she also assured me that my payments are still in payment and I have nothing to be concerned about! She actually agreed that the letter wasn't very clear and in fact apologised for it.
Little do they know how badly these things impact on a persons wellbeing! If it hadn't been for this site I would have lost another nights sleep last night.
Thank you
Tricia